Senate Finance Bill: Only Slightly Less Deadly

So you’ve seen the news. The Senate Finance Committee has come out with its version of a government takeover of health care. On the plus side, no “public option” (aka, government-run health insurance company).

But there are a lot of negatives.

• It does have a “public option,” but it’s called a co-op and given $6 billion. Free start-up money? So much for a level playing field.
• There’s of course a huge cost to the whole package ($856 billion for 10 years) that will only increase exponentially over time.
• Much of these subsidies are given to the middle class — up to 400 percent of the federal poverty level. (We’re all on welfare now.)
• It creates an “exchange,” or heavily constricted “marketplace.” (If you want a true marketplace, strip away the built-in advantages that incumbent insurance companies have and let them go at each other, across state borders.)
• It levies a tax on everyone who doesn’t have insurance — up to $3,800 per year, in effect a tax on being alive.
• An expansion of Medicaid, a program that already pays doctors so little that some people in it have a hard time finding a doctor.
• A play-or-pay mandate on employers.
• Requires insurance companies (and in turn, you) to sell insurance to people who’ve already come down with a “pre-existing condition.”
• Forbids insurance companies from buying (and you from buying) policies with lifetime caps on benefits, thus making insurance more expensive for all.

How does the plan pay for all this? First there’s an excise tax on high-dollar insurance plans. This actually isn’t the worst feature of the bill. You can make the case that some high-dollar plans are actually very expensive pre-paid forms of medical care that the tax code should not underwrite. And any plan to create a personal tax credit so that people can buy insurance on their own would likely affect the same people as this excise tax would.

But the second income stream is worse; it would tax pacemakers and other pieces of medical hardware that improve lives every day.

Sen. Baucus, chairman of the Senate Finance Committee, doesn’t tell the whole truth. He says it wouldn’t add to the deficit. That’s likely to go the way of other promises regarding government plans, such as a promise that Medicare would not become the fiscal monster it has become.

Medicare Advantage, which enrolls about 1 in 5 seniors, also gets a whack. So much for “if you like your insurance, you can keep it.” No, the plan doesn’t outright ban Medicare Advantage, but it’s likely to drive companies to drop their participation.

All in all, the bill isn’t that much better than the House bill. It’s like getting shot in the head with only five bullets instead of six.

Cross-posted from State House Call.

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